Remember that as time goes on drive space prices fall as well. If you build backblaze storage pods[1] a petabyte over 3 years costs you a little under 100k. If we assume the average email user uses around half a gigabyte[2], we can accommodate around 2.1 million accounts on the petabyte (more if you compress the data). Throw in another two petabytes for compressed backups and you've got a million email accounts for 150k, or $0.15 an account (over three years). If you show users ads that average more than 15 cents per user over the course of three years you're making money (less paying employees that don't operate the storage, etc.). The actual numbers may even be less. Combined with the fact that the price of storage seems to still be going down at a rate that most likely is faster than user inbox growth, and you'll never hit this particular singularity.

[1] http://blog.backblaze.com/2011/07/20/petabytes-on-a-budget-v...

[2] 200MB more than the amount currently in my gmail; I have email going back six years and I never delete emails, but I'm not a heavy email user.

EDIT: Formatting

No, Gmail is a fermion. Therefore it is impossible for a second fermion with identical properties to occupy the same quantum state as per the Pauli exclusion principle.

Sorry, physics humor. Real answer:

Drive space is very cheap today. It is not hard to offer several GB per user. Email as it is currently implemented only supports messages of about 10MB each at max, while typical messages are text-only or include only a few low-res images as attachments. For typical users, it is therefore not probable that they will ever accumulate data at a rate faster than is currently the case since it is a protocol limit. Historical trends have also shown that larger file transfers are simply routed to other methods, so it is unlikely that email will be overhauled simply to increase the per-message size limit.

Monetizing it as a free service in a way which is not onerous to users and convincing users that they should use your service versus a more well-known and established provider are the hard parts. Solve that, and you've got a good competitor. Don't solve that, and you've got a money sink.

There's no need to close off an old account when you move to a new service, so you can leave your gmail as an archive - that makes for an easy spring clean too. My guess is that as cloud platforms evolve though, more and more will offer ways out - since people/companies will begin demand it before signing up as competition mounts. Those "ways out" will initially be bulk downloads (like Facebook's "download your info" feature), but over time will become more useful, offering filters on what's downloaded, pagination on downloading data, and migration APIs such that new services can pull data from the old ones without you needing to middle man the data. This isn't of benefit to providers though, which is why it relies on competition / user adoption based on ways out, and also why it will take time to become the norm.

I believe so. Opera show cased this beta email design/feature set which was very appealing for anyone not interested in using Google's services. They do seem to be innovating though, the new Gmail design is much better in my opinion and if Google+ takes off it'll become even further integrated into your life.

I think Google really wants G+ to link all of the Google services we use together and bring people onto services they weren't previously using. For those which live in Google this is great but for those which only want to try G+ or use one service it puts more barriers in your way.

Overall, I'm not very impressed with gmail. I'd like to think that a new email service could lure people away, simply by providing a better product.

(Not that the particulars matter, but I find gmail slow, ham-handed in its organization, ugly, and strangely lacking, given its origins, in the searches it supports. Not to mention the fact that the cursor periodically disappears when composing messages on one of the three machines I use it on.)

Not only can the be another Gmail, but there's also a huge need for it. Gmail lags quite a lot (even on fast connections), and the price you have to pay to get it for free is the fact that Google builds a huge database on your person/interests, and that American authorities have easy access to your data because of the Patriot Act.

I'd much rather pay a small sum of money to a provider in Europe ( = better privacy laws).

Do you have to offer migration initially? I don't think it's something that every service has launched with. And there's a steady stream of new email users every year.

A few non-techy people have asked me if there are email services that don't read your email for contextual ads, and they would be willing to pay. So I think there's a market there, albeit a smaller one that the free email provider one.

I'd say so, if its features + spam protection are as good. People (not only me!) dislike having all their eggs in the Google basket.